What is the purpose of cost shifting and case mix


1. What is the purpose of cost shifting and case mix management? Explain concepts and give examples if needed.

2. You take a one year installment loan of $1000 at an interest rate of 12% per year (1% per month) to be repaid in 12 equal monthly payments.

a. What is the monthly payment

b. What is the total amount of interest paid over tge 12 month term of the loan?

3. A bond has ten years to maturity and a coupon rate of 7% selling at 102. It has a call provision exercisable in three years for a price of 107. Using the TI-84 Plus Silver Edition Calculator.

a. What is the yield to maturity?

b. What is the yield to call?

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Financial Management: What is the purpose of cost shifting and case mix
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